October 21, 2006

 

CBOT Soy Review on Friday: Drifts lower on end-of-week profit taking

 

 

Chicago Board of Trade soybean futures ended Friday's session posting modest declines, scaling back prior gains on end-of-the-week profit taking.

 

November soybeans finished 1 1/2-cent lower at US$6.06 1/2. December soymeal settled US$1.70 higher at US$180.40 per short tonne, while December soyoil ended 37 points lower at 26.17 cents a pound.

 

For the week, November soybeans were up 15 cents, December soymeal was US$0.70 higher, and December soyoil was up 124 points for the week.

 

The market had trouble establishing lasting direction over the course of the day, but did carve out a new move high, before pre-weekend position squaring surfaced to pin prices in negative territory down the stretch, analysts said.

 

Technical momentum remained a supportive feature, but without any fresh news to attract aggressive buying coupled with weakness in outside markets, traders were encouraged to book some profits, said a CBOT floor analyst.

 

The most-active November future scored an outside lower day on technical charts, generating thoughts that upside momentum may be a little exhausted after the week's solid gains, traders added. Meanwhile, lingering concerns over harvest delays in the eastern Midwest and potential for field losses in the region managed to provide light support.

 

The DTN Meteorlogix forecast says Midwest crop areas will have cooler and showery weather during the weekend, making it difficult for harvest. Showers will develop Friday night in the western Midwest, and continue through Saturday morning, while spreading eastward into the central and eastern Midwest during the day Saturday. Temperatures will drop to below- to much- below normal for the season. The outlook for next week now indicates a widespread prospect for significant moisture across most - if not all - of the central U.S., the forecast said.

 

In pit trades, Fortis bought 600 November, Goldenberg Hehmeyer bought 500 January, JP Morgan bought 400 November, and Fimat bought 300 November and 300 January.

 

On the sell side, Prudential Financial sold 500 November, Man Financial sold 300 November and UBS Securities sold 400 January.

 

Day session volume for soybeans on the e-CBOT platform totaled 26,956 contracts.

 

South American soybean futures ended lower, with the November futures settling 2 cents lower at US$6.76.

 

 

SOY PRODUCTS

 

Soy product futures ended Friday's session mixed. Soyoil futures ended a two-sided session lower across the board, retreating from prior gains. The market backpedaled on speculative profit taking, with the exhaustion of upside movement and weakness in crude oil futures amid its influence on biofuel inputs weighed on prices, analysts said.

 

Soymeal futures finished higher, bolstered by soyoil/soymeal spread unwinding. Despite the higher price action, futures maintained a sideways theme, continuing its consolidative measures, traders said.

 

January oil share ended at 42.33% and the November/December crush ended at 78 1/4 cents.

 

In soymeal trades, buyers and sellers were widely scattered among various commission houses.

 

In soyoil trades, buyers were scattered among various firms, with Fimat and JP Morgan each buying 300 December. Sellers were widely scattered as well, with Bunge Chicago selling 400 December, and Fimat and Rand Financial each selling 300 December.